Texas City emergency lifted as power comes back

BenLefebvre

(Adds information about lack of back-up generation in refineries, the lifting of the Texas City emergency measure, and comments from local residents)

TEXAS CITY, Texas -(MarketWatch)- Local emergency-response officials lifted an emergency shelter order as power was restored to refineries and petrochemical facilities on Tuesday, lessening the chance of harmful emissions or fires.

"The shelter-in-place warning has been lifted" at around noon, said Bruce Clawson, Texas City's director of emergency management. The measure, which asked residents to stay indoors and turn off their air conditioners, was initially enacted late Monday as power outages caused disruptions at several of the area's refining and petrochemical facilities, including a brief fire at a large refinery owned by BP PLC (BP, BP.LN). Texas City, an industrial suburb of Houston, contains one of the largest concentrations of refineries and petrochemical facilities in the world.

The outages, which a local power provider said were the result of residue built up on electrical equipment during an unusually dry spring, caused the temporary shutdown of about 4% of U.S. refining capacity.

Valero Energy Corp.'s
VLO, -2.18%
214,000 barrel-a-day and Marathon Oil Corp.'s
MRO, -3.31%
76,000 barrel-a-day refinery were down, but are now in the process of restarting, the companies said. A Dow Chemical
DOW, -1.19%
facility that temporarily shut down was also ready to get back online as soon as the citywide shelter order is lifted, according to the company.

BP Texas City, the same refinery that suffered a catastrophic blast in 2005, saw a fire break out shortly after the facility lost power, but it was quickly put out with no injuries. A BP spokesman said that the facility still did not have reliable power, preventing the company from restarting units at the giant 475,000 barrel-a-day refinery.

The power outages highlight how weather is wreaking havoc on Texas's electricity and energy infrastructure. Last February, cold weather resulted in rolling blackouts in Texas, which triggered natural gas shortages across the Southwest.

Refineries typically have back-up generators, but they're not big enough to run the power-intensive machinery needed to turn crude into gasoline. When Valero suffered an extended power outage at its Port Arthur, Texas, refinery during Hurricane Rita in 2005, it had to fly in a giant industrial generator using a Russian aircraft that was the world's largest cargo plane, said Valero spokesman Bill Day. But it was insufficient to run the entire refinery, he said.

Texas New Mexico Power Co., which operates the power transmission line that goes into Texas City, said there were four separate outages, only one of which occurred in its installations and led to the outage at Valero. The company blamed lack of rain; residue that would have normally been washed away accumulated on top of electrical equipment instead. "April has been extremely dry, which led to this build-up," spokeswoman Cathleen Rineer-Garber said in an email. "High humidity late last night and early this morning, coupled with the build-up of residue, appears to have triggered the fault."

The other outages took place at equipment owned by the refineries and industrial plants that suffered the outages. TNMP said it didn't know exactly what caused those outages, but it is possible that they were "triggered by similar conditions." BP and Marathon said they're still looking into the cause of the outages.

Authorities had issued a first "shelter-in-place" order late Monday after BP reported the outage, lifting it around 3 a.m. local time after determining the fire at the facility was under control. But authorities reissued the order after it became clear that other facilities had been affected by outages as well.

Refinery outages still frighten even those who have lived their entire lives in the shadow of BP's megalithic refinery, the third largest in the country. The BP refinery was the site of an explosion and fire that in 2005 killed 15 workers and wounded another 170.

Amanda Hobby, a Texas City native who can see the BP refinery from her house, spent a sleepless Monday night comforting her children, scared by the booms.

"It was bad enough that my kids stayed up all night, wondering if the refineries were going to blow up," she said. They fell asleep around 2 a.m. Tuesday, only be woken at 5 a.m. with another alarm and order to shelter in place.

At about 11 p.m. Monday, Fabian Irish awoke to the smell of sulfur in his bedroom. It was so intense, the 29-year-old said, it was "like somebody kicked over a latrine."

Then Irish and his girlfriend, Pam Stinson, heard a succession of booms. They looked out the window of their house, a one level affair with yellow siding and green trim, just blocks north of BP's refinery. Flares from the smokestacks had set the sky ablaze, bathing her lawn in a fiery glow.

"My whole backyard was orange," Stinson said.

Their phones began ringing and their phones buzzed with text messages of concern from friends and family, and rumors of a leak at the BP refinery, and then problems at other facilities. The smell was nauseating and Stinson felt sick to her stomach. She and Irish left their house and spent the rest of the night at his mother's house.

BP said in February it hoped to sell the 475,000-barrel-a-day refinery by the end of next year. Executives at the time said a sale could bring in about $4 billion, which will help offset the cleanup and litigation costs stemming from the 2010 Gulf oil spill.

BP said that fire broke out at a crude distillation unit within the refinery shortly after the entire facility lost power at 11 p.m. local time Monday. BP added that the blaze was put out shortly afterward by a plant safety team.

At least nine tall flames could be seen from a nearby highway, according to the Galveston County Daily News, which first reported the incident early Tuesday morning in its online edition. During shutdowns, refineries usually burn the gas they use to process the fuel in order to relieve pressure, an operation known as "flaring."

BP America said in a statement it had immediately notified the city following the power failure.

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